Starvest PLC
21 April 2008
Half-year report - six months ended 31 March 2008
Chairman's statement
Investment report
As announced on 1 April, the past months have been challenging, particularly
during March when market sentiment and small volume selling have adversely
impacted the share prices of most of the companies in which Starvest is
invested. The overall asset valuation has fallen to £11.5m, the level declared
at 30 September 2006. This is disappointing but not unexpected in the current
climate. Furthermore, it is entirely possible that the value will fall further
prior to an improvement in sentiment.
More importantly, in spite of the decline in the net asset values, the Board has
confidence in the business plans and management of its investee companies; as
market conditions improve, the Board expects that market prices will recover.
This is particularly true of the majority of investee companies with mineral
exploration activities; these continue to make advances in their discoveries of
minerals and in developing their resources to take advantage of buoyant market
conditions. Minerals continue to be in high demand by emerging economies, a
fact which is unlikely to change in the medium term.
Against this background, the Board is satisfied with the investments currently
held.
Other points of note during the half year:
The net asset values are pre tax and based on mid-market closing
prices on Monday 31 March 2008 or, in two cases, the Directors' lower
valuation.
The share price discount to net asset value widened to 45% as at 31 March,
a level of discount not seen since the first quarter of 2007.
Starvest has added to its investments in three AIM quoted mineral
exploration ventures, Alba Mineral Resources plc, Lisungwe plc and Ariana
Resources plc; in addition, the Company has made a small investment in PLUS
quoted CAP Energy plc and a further investment in Lotus Resources plc.
The loss on ordinary activities before taxation for the period amounted to
£672,206 (2007: profit of £748,670). The loss includes administrative
expenses amounting to £153,380 and an impairment charge of £547,088 to
reflect the unrealised losses on some investments.
Unrealised profits as at 31 March 2008: £6.6m (2007: £12.2m) before tax.
Basic loss of 1.9 pence per share (2007: earnings of 1.41 pence per share);
fully diluted loss of 1.7 pence per share (2007: earnings of 1.23 pence per
share).
Starvest now holds investments in thirty-four companies of which eighteen
are traded on AIM, eleven on PLUS Markets, one on the Toronto exchange and
one on the North American Pink Sheets; a further investee company is
expecting to become PLUS quoted during the current quarter and two others
have suspended their quotations. The companies are listed on pages 9 to
11 of this report. Given market conditions, the Board continues to be
satisfied with progress in its portfolio of investments.
Starvest continues to receive new investment proposals from businesses, mainly
in the natural resources sector. Before a commitment is made, these are closely
evaluated to ensure that they accord with the Company's medium to long term
investment strategy.
Company statistics
31 March 2008 Change since 31 31 December 31 March 2007
March 2007 2007
Portfolio net asset value £11. 5m -25% £15.2m £15.4m
Net asset value - basic per share 33.01p -21% 43.63p 41.8p
Net asset value - fully diluted 29.9p -21% 39.06p 37.7p
per share
Share price 16.25p -38% 24.25p 26.5p
Share price discount to fully 45.6% +15.9 points 37.92% 29.7%
diluted net asset value
Market capitalisation £5.67m -£4.03 £8.46m £9.7m
Dividends and share buy-back
The Board will consider the payment of a dividend for the current year when the
results for the full year are known after 30 September 2008; there is no
intention of repeating the payment of a special dividend as in June 2007
following the exceptional profits arising from the successful disposal of
African Platinum plc.
At the beginning of the period, the Board had authority to purchase up to
3,550,000 of its own shares. On 22 November 2007 the Company purchased 250,000
of its own shares in the market at an average price of 29.1 pence per share.
Further information
Those Shareholders who wish to receive electronic copies of regulatory
announcements are invited to register their email address on the home page of
the Company website: www.starvest.co.uk. Previous reports, quarterly updates
and announcements are available from the site.
Your Board continues to look to the future with optimism; we expect further
progress in the next quarter and plan to issue the Chairman's next update during
July 2008.
R Bruce Rowan
Chairman & Chief Executive
21 April 2008
Profit & loss account
6 months to 31 6 months to 31 Year ended
March 2008 March 2007 30 September 2007
Unaudited Unaudited Audited
£ £ £
Operating income 16,716 956,567 5,494,067
Direct costs (15,430) (54,974) (177,924)
Gross profit 1,286 901,593 5,316,143
Administrative expenses (153,380) (128,726) (272,076)
Impairment of trade investments (547,088) - -
Operating (loss)/profit on ordinary activities (699,182) 772,867 5,044,067
Interest receivable 72,728 9,268 71,114
Interest payable (45,752) (33,465) (84,413)
(Loss)/profit on ordinary activities before (672,206) 748,670 5,030,768
taxation
Tax on profit on ordinary activities - (225,000) (1,505,236)
(Loss)/profit on ordinary activities after taxation (672,206) 523,670 3,525,532
(Loss)/earnings per share - see note 4
Basic (1.9) pence 1.4 pence 9.6 pence
Fully diluted (1.7) pence 1.2 pence 8.8 pence
Balance sheet
6 months to 31 6 months to 31 Year ended
March 2008 March 2007 30 September 2007
Unaudited Unaudited Audited
£ £ £
Fixed assets - - -
Current assets
Debtors 31,980 10,370 10,257
Trading investments - see note 2 5,499,136 3,590,082 4,750,185
Cash at bank and in hand 1,341,142 1,127,660 3,006,588
6,872,258 4,728,112 7,767,030
Creditors - amounts falling due within one
year
Other creditors (2,574,467) (1,652,860) (2,548,969)
Net current assets 4,297,791 3,075,252 5,218,061
Total assets less current liabilities 4,297,791 3,075,252 5,218,061
Capital and reserves
Called up share capital 372,173 372,173 372,173
Share premium account 2,026,396 2,026,396 2,026,396
Profit and loss account 1,899,222 676,683 2,819,492
Equity shareholders' funds 4,297,791 3,075,252 5,218,061
Cash flow statement
6 months to 31 6 months to 31 Year ended
March 2008 March 2007 30 September 2007
Unaudited Unaudited Audited
£ £ £
Net cash (outflow)/inflow from operating (1,443,358) 361,491 3,484,305
activities
Returns on investment and servicing of
finance:
Interest receivable 72,728 9,268 71,114
Interest payable (45,752) (33,465) (84,413)
26,976 (24,197) (13,299)
Taxation paid - - (395,880)
Equity dividends paid (175,586) - (367,172
(175,586) - (763,052)
Financing:
Company shares repurchased (73,478) (86,000) (577,732)
New short term loan - 1,000,000 1,000,000
(73,478) 914,000 422,268
(Decrease)/increase in cash in the period (1,665,446) 1,251,294 3,130,222
Opening cash balance brought forward 3,006,588 (123,634) (123,634)
Closing cash balance 1,341,142 1,127,660 3,006,588
Movement on equity shareholders' funds
6 months to 31 6 months to 31 Year ended
March 2008 March 2007 30 September 2007
Unaudited Unaudited Audited
£ £ £
Total recognised (loss)/profits relating to the (672,206) 523,670 3,525,532
period
Dividend paid (175,586) - (367,172)
Purchase of own shares for Treasury - see note 3 (73,478) (85,851) (577,732)
(Decrease)/increase in shareholders' funds (921,270) 437,819 2,580,628
Opening shareholders' funds 5,218,061 2,637,433 2,637,433
Closing shareholders' funds 4,296,791 3,075,252 5,218,061
Interim report notes
1. Interim report
The information relating to the six month periods to 31 March 2008 and 31 March
2007 is unaudited.
The information relating to the year ended 30 September 2007 is extracted from
the audited accounts of the Company which have been filed at Companies House and
on which the auditors issued an unqualified audit report.
2. Basis of accounting
The report has been prepared using accounting policies that are consistent with
those adopted by the Company in accordance with UK GAAP for the statutory
accounts for the year ended 30 September 2007, although the information does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985.
The Company will report again for the full year to 30 September 2008.
The Company's investments at 31 March 2008 are valued at the lower of cost or
mid market value or, in two instances, at a lower Directors' valuation.
3. Share buy back
On 22 November 2007, the Company bought 250,000 of its own shares at an average
price of 29.1 pence to be held in Treasury. Shareholders' funds were reduced by
£73,478.
4. Earnings per share
6 months to 31 6 months to 31 Year ended
March 2008 March 2007 30 September 2007
Unaudited Unaudited Audited
£ £ £
These have been calculated on a (loss)/ (672,206) 523,670 3,525,532
profit of:
The weighted average number of shares used 34,997,860 37,022,204 36,608,492
was:
Basic (loss)/profit per share: (1.9) pence 1.4 pence 9.6 pence
The weighted average number of shares and 40,572,860 42,597,204 40,229,710
outstanding options used was:
Fully diluted (loss)/profit per share: (1.7) pence 1.2 pence 8.8 pence
Investment portfolio
Starvest now holds trade investments in the following companies:
Addworth plc Active capital investment company
www.addworth.co.uk
Alba Mineral Resources plc Nickel, uranium & gold in Scotland, Mauritania,
Sweden and Ireland
www.albamineralresources.com
Agricola Resources plc Platinum and uranium exploration
www.agricolaresources.com
Ariana Resources plc Gold exploration in Turkey
www.arianaresources.com
Belmore Resources (Holdings) plc Zinc exploration in Ireland
www.belmoreresources.com
Beowulf Mining plc Gold and copper exploration in Sweden
www.beowulfmining.com
Black Rock Oil & Gas plc Oil and gas in Colombia
www.blackrockoil.com
Brazilian Diamonds Limited Diamond exploration in Brazil
www.braziliandiamonds.com
CAP Energy plc Oil & gas production in North America
www.capenergy.co.uk
Carpathian Resources Limited Oil and gas exploration in Central Europe
www.carpathian.com.au
Concorde Oil & Gas plc Operational oil and gas projects in the Russian
Federation
The Core Business plc Personal care and beauty products
www.thecorebusiness co.uk
DTT plc Driver training and recruitment services to the
road haulage industry
www.dttdriving.co.uk
Equity Resources plc Investment holding company
Franconia Minerals Corporation North American minerals
www.franconiaminerals.com
Fundy Minerals Limited Gold and base metal exploration in Canada and West
Africa
www.fundyminerals.com
Gippsland Limited Tantulum exploration in Egypt
www.gippslandltd.com.au
Goliath Resources Inc. Copper, gold & molybdenum in Canada and Zambia
www.goliathresources.com
Greatland Gold plc Gold exploration in Western Australia and Tasmania
www.greatlandgold.com
Guild Acquisitions plc Investment holding company
Hidefield Gold plc Gold exploration in North and South America
www.hidefield.co.uk
India Star Energy plc Oil and gas investments
Kefi Minerals plc Mineral exploration in Turkey
www.kefi-minerals.com
Lisungwe plc Nickel, uranium & gold in Malawi
www.lisungwe.com
Lotus Resources plc Mineral exploration in China
www.lotus-resources.com
Matisse Holdings plc Cash shell
Myhome International plc Domestic services franchiser
www.myhomeplc.com
Oracle Coalfields plc Coal mining in Pakistan
www.oraclecoalfields.com
Red Rock Resources plc Iron ore and manganese exploration in Australia and
Zambia
www.rrrplc.com
Regency Mines plc Copper & nickel exploration in Australia and Papua
New Guinea
www.regency-mines.com
Sheba Exploration (UK) plc Gold exploration in Ethiopia
www.shebagold.com
St Helens Capital plc Corporate finance advisor
www.sthelenscapital.com
Sunrise Diamonds plc Diamond exploration in Finland
www.sunrisediamonds.com
Treslow Limited Copper & nickel in Ontario, Canada
Copies of this interim report are available free of charge by application in
writing to the Company Secretary at the Company's registered office, 123
Goldsworth Road, Woking, GU21 6LR, by email to email@starvest.co.uk or from the
Company's website at www.starvest.co.uk.
Enquiries to:
Bruce Rowan, Chairman, telephone 020 7486 3997 or
John Watkins, Finance Director, telephone 01483 771992 or to john@starvest.co.uk
Grant Thornton Corporate Finance
020 7383 5100
Gerry Beaney
Colin Aaronson
END
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